FiscalNote Holdings, Inc. (NYSE:NOTE) Q4 2022 Earnings Call Transcript

Mike Latimore: Yes, great. And then, just last on the few acquisitions you made over the past year. Can you talk about have you seen improved growth rates or good cross-sells or just a little bit more on the traction from the most recent acquisitions.

Jon Slabaugh: Sure, Mike. We’ve seen really impressive acceleration out of the acquisitions when we filed the 10-K later, there’ll be some breakouts in details there. I’ll share with you that the legacy business grew at a rate of 11% year-over-year, while the acquisition cohort from 2021 and ’22 were in the 20 — I think 21% growth for those was 23%, 23% for the acquisition group. And that just represents putting it on the platform, giving them access to our customer base and really letting our business development team do their work to drive revenue growth.

Operator: Our next question comes from Rudy Kessinger from D.A. Davidson.

Rudy Kessinger: Jon, you said — I think you said a year from now, you expect about $30 million plus in cash. And so I guess you’re effectively saying $30 million or less of cash burn over the next 12 months. Is that inclusive of your expectations of future acquisitions over the next 12 months? Or is that just based on the core business as it is today with no acquisitions take in?

Jon Slabaugh: Sure. That’s excluding any acquisitions you might do between now and then, it’s the operating model that we’ve built for the business as it stands today and taking into consideration growth, operating expense, the CapEx and seasonality of the business as well. And just as a point of clarification that when I say a year from now, I’m referring to a year from today as well.

Rudy Kessinger: Okay. So effectively end of Q1 — end of Q1 ’24, not Q4 ’23, Okay. And then what is the — what’s the go-forward interest expense. I don’t know if you can break it out especially for Q1 or for the full year, but roughly $6.1 million in Q4. You made another acquisition in Q1 brought us some more debt. What’s — and rates have changed us? What’s the go-forward interest expense for Q1 and calendar ’23?

Jon Slabaugh: I think I referenced this in the call, the cash interest expense is $4.5 million to $5 million. And in light of the recent change you might use the higher end of…

Rudy Kessinger: Okay. I think you might have broken up at the end of the year. And then maybe just one last for me. In Q4, I know we’ll get this in the 10-K, but how much revenue came from DT Global and ASO in Q4? And then when we look at your revenue guide for ’23, how much revenue do you have baked in there from Dragonfly DT Global and Aicel?

Jon Slabaugh: 3000 in Q4 for those 2 entities. When we think about the year going forward, Rudy, the guidance we gave, we gave it kind of with and then in the — I guess in the previous filing, gave a range of Dragonfly revenue, which was 6.5 million pounds or at $7 million. So you can back that out of the guidance range as well. So when you do that, I think you wind up with an organic growth rate at Dragonfly of approximately 13% to 17%…

Rudy Kessinger: Okay. Got it. That’s it for me.

Jon Slabaugh: We may do some work to back out Aicel in Data Hunt , specifically if that’s something you want to follow up on.

Rudy Kessinger: For D&A ?

Jon Slabaugh: Yes, D&A.

Rudy Kessinger: Okay. Thanks.

Operator: Our next question comes from Mike Albanis from Hutton .

Unidentified Analyst: Congrats on a nice Q4, and so I finish to the year. I just had one clarifying question for you. I think about 2023 guidance; I think you mentioned additional at the midpoint, an additional $25 million revenues, 80% margin, so $20 million incremental gross margin and then an incremental 3% to 4% in OpEx kind of on top of your current, I guess, cost basis plus some savings that you had talked about. Can you just kind of walk me through that one more sense.